Property Management
Which of the following clauses in a commercial lease would allow a landlord to increase rent annually based on the Consumer Price Index (CPI)?
APercentage rent clause
BEscalation clause or CPI adjustment clause✓ Correct
CTriple net clause
DGross up clause
Explanation
An escalation clause (or CPI adjustment clause) in a commercial lease allows the landlord to increase the base rent periodically based on changes in the Consumer Price Index or another measure of inflation. This protects the landlord against inflation eroding the purchasing power of fixed rent over time.
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